The great disappearing act: Gender parity up the corporate ladder

Ambition, competence, determination and resourcefulness do not
come with gender labels. Indeed, as the world economy increasingly
shifts from brawn-power to brain-power, women are joining the ranks
of the employed in greater and greater numbers. Women now
constitute nearly 50 percent of the US workforce. In the EU, women
filled 75 percent of the 8 million new jobs created since 2000.
Globally, for the first time in a century, working women coped with
economic adversity better than men: In the US, men suffered 75
percent of all the jobs lost in the recent recession .

But then, something disturbing happens to women as they climb
rungs up the corporate ladder-they disappear. Women have yet to
rise to leadership levels at the same rate and pace as their male
counterparts. Women enter the workforce in large numbers, but over
time steadily "vaporize" from the higher echelons of organization
hierarchy. In 2009, only 3 percent of Fortune 500 companies had a
female CEO . In Europe, women constitute just 12 percent of the
boards of directors of FTSE 100 companies -25 percent of these
companies still have all-male boards .

In recent years, while women gained ground on gender equality
issues like discrimination and harassment, they continued to
struggle on gender parity issues like career development and access
to leadership positions. As they try to balance priorities such as
career-building and care-giving, often they find themselves
slipping behind in the race to the top. While many organizations
offer myriad flexible-work programs to help women return to the
workforce, few currently have innovative promotion policies or
growth paths in place that rejuvenate the careers of employees
(male or female) who return to the fold after a break of few years.
Increasingly, instead of languishing in stalled careers, women opt
to become entrepreneurs. Every day in the US, 1,600 new businesses
are started by women entrepreneurs. Women-owned businesses are
growing at twice the rate as all other businesses .

As the economy picks up, management teams will again need to
focus on finding and keeping top talent-men and women.
Organizations will find filling the talent pipeline difficult if
they do not focus on retaining the female half of the workforce. In
interviews with the human resources directors at 25 large European
companies, Bain & Company found that organizations pay a huge
price for ignoring this issue. Our research shows that talent
significantly bleeds away when an organization loses a
disproportionate number of women employees at middle and senior
levels: Even a 5 percent difference in attrition yields nearly two
times the number of men than women after 10 years. A 5 percent
decrease in female retention, after 10 years, results in the
equivalent of wiping out the benefits of increasing female
recruitment from 30 percent to 50 percent. And most shocking of
all: If one-third of the women employees in an organization go
part-time, 50 percent more men than women will tend to be promoted
over the next five years .

What prevents organizations from retaining their best female
talent and promoting them to top management roles? To understand
the hurdles in the path to parity up the ladder, Bain & Company
recently conducted a worldwide survey-in association with the
Harvard Business Review-on "Gender Parity in the Workplace." The
survey attracted more than 1,800 respondents, with nearly 60
percent in senior management or executive positions. While more
than 75 percent of the respondents are women, men actively
participated in the survey-often providing a provocative and
thought-provoking counter-point.

The survey results show that while both men (91 percent) and women
(82 percent) aspire to be senior leaders in their organization,
fewer women realize their dreams than men. While 66 percent of the
men report that they believe women share equal opportunity to be
promoted to leadership and governance positions, less than a third
of the women feel the same. The survey findings and detailed
follow-up interviews indicate that three major issues block the way
to gender parity in many organizations.

1. Real perception gap exists on the current state of
gender parity

Despite the high number of women entering the workforce, many
organizations are still not convinced of the business case for
gender parity in organizations. The Bain survey reveals that while
most men and women agree that gender parity in general is a desired
goal-the two sexes diverge in their opinions when the question
focuses on just how important gender parity should be in their
organization. While a majority of all respondents-men and
women-support the idea of gender parity in the workplace, when
asked whether parity should be a business imperative in their
organization, it is the women who vote strongly in favor of the
strategic commitment: More than 80 percent of the women agree or
strongly agree. However, only 48 percent of the men feel that
achieving gender parity should be a critical business imperative
for their organizations.

Men consistently perceive greater gender parity than women when
it comes to key workforce milestones like recruitment, promotions
or appointment to leadership positions. Interestingly, both men and
women feel that gender parity visibly wanes at senior levels of
their organization. The survey results show, for example, a
majority of both men (90 percent) and women (85 percent) believe
that at their companies qualified candidates of both genders have
equal opportunity to be recruited into junior level positions.

But when asked about recruitment or promotion into management or
executive positions, both men and women are less likely to agree
that parity exists-and men see a rosier picture than women. In the
survey results, about twice as many men as women feel that women
have an equal chance as men of being recruited in executive roles,
promoted on the same timeline into executive roles, or appointed to
key leadership or governance roles.

Clearly, as long as there is a perception gap between genders,
it will be harder for organizations to pursue the goal of gender
parity-particularly as key decision-makers in top leadership
positions are currently more likely to be male, and they might or
might not perceive parity standards in the same way as the women
who work for them do. Says a female senior manager, from a large
insurance company based in North America: "The corporate world's
ladder is set up for a man's biological clock, not a woman's. You
achieve success climbing in your 20s, 30s and 40s-but that's also
when you're building a family. That dynamic needs to change."

II. Stuck on the "mommy track": Balancing the role of
caregiver with career-builder

Despite the rising number of families in the US and Europe where
the father stays at home and is the primary caregiver, society has
still not shaken off the deep-rooted belief that a woman does that
job better. While 80 percent of the women surveyed feel that both
men and women are equally good caregivers at home to children, only
56 percent of the men surveyed agree. Other survey questions that
probed deeper revealed that often women drop out of the career race
to take care of home-or feel burdened under the dual
responsibilities of managing a career and the family. Says a woman
executive in the entertainment industry: "In addition to holding a
senior executive position at my agency, I am still the wife and
mom. I still cook dinner a few nights a week and do a lot of things
that I would not do if I were the husband."

Both men (87 percent) and women (91 percent) vote in large
numbers in favor of the belief that either sex could be a primary
breadwinner. When it comes to actually making career sacrifices,
however, men and women tend to react differently. While 59 percent
of women agree they would sacrifice their career for the sake of
the household, a slightly lower 53 percent of men feel the same
way. Men tend to be more confident than women that their partner
would make a career sacrifice: in the survey results, 77 of the men
feel their partner would compromise on their career for the sake of
family, while only 45 percent of women could confidently make the
same claim.

For both sexes, increasingly, finances are often at the core of
who would sacrifice what. Says one junior male executive: "Our
income differential decides whose career has priority." A female
senior manager in real estate comments: "The earning potential has
a lot to do with which career takes priority. We both make very
good salaries, but my husband works in finance (and earns
more)."

In practice, the survey results reveal that women tend to make
more compromises in terms of putting their partner's career ahead
of theirs. They are two times more likely to take a flexible career
path or a leave of absence and three times more likely to work
part-time. It must be noted though, that the survey did reveal that
a growing number of men are willing to make similar sacrifices to
support the careers of their partners-it's just that in the absence
of gender parity in the workforce, fewer men are called upon to
make those sacrifices as their partner rises to senior executive
positions.

According to the survey results, in order to support a partner's
career priorities, more women than men worked from home (women: 47
percent; men: 31 percent); moved or relocated in support of the
partner (42 percent; 35 percent); turned down attractive job
opportunities (34 percent; 26 percent); pursued a flexible career
path (36 percent; 19 percent); opted for part-time or flex-time
work (30 percent; 10 percent); or simply took a leave of absence
from work (26 percent; 14 percent).

Unless organizations find ways to help employees balance
work-life priorities-and encourage both male and female employees
to pursue those options-it will be impossible to achieve gender
parity. The survey reveals that just as, often, behind a successful
man there is a supportive partner staying at home-behind many
successful senior woman executives too is a supportive spouse. Says
a female executive with adult children: "I am the breadwinner of
the family. My husband's career allows for flexibility to support
my demanding hours and travel. Without that, I couldn't do what I
do."

III. Organizations have to show sustained commitment and
action on gender parity

The survey results send a strong message to business leaders
that the majority of employees do not see the current initiatives
aimed at helping achieve gender parity as successful. The single
most important test employees put their organization to: the number
of women rising to the top. The survey results reveal the
frustration employees feel with their organization's existing
initiatives on gender parity-or worse, complete dissatisfaction
with the organization's insensitivity to the progression of male
and female career paths.

More than three-quarters of the respondents in Bain's survey say
their company has implemented gender-parity initiatives-such as
flex-work programs and mentorship-but many feel these programs are
not effective. Only one in four respondents feel that their company
leadership sees gender parity as a priority and only one in five
believe their company has committed adequate resources to the
initiatives. As few as 14 percent say they receive effective gender
parity training or workshops and only 8 percent of the respondents
feel that their firm succeeds in linking incentives and
compensation to gender-parity goals. Says a woman junior
manager in a global accounting firm: "Large corporations are deeply
entrenched in their ways and despite good intentions, are having a
difficult time making this transition (to gender parity)."

Companies also need to measure the current state of gender
parity, as well as monitor the progress of gender parity
goals-across all levels of the organization. The survey results
show that many employees feel that their company does not collect
enough data on gender parity issues. Less than 20 percent of the
survey respondents report that their company uses gender parity
metrics effectively. The feedback is no better for other
talent-management metrics: Less than half of those surveyed know if
their company tracks measures like the percent of women recruited,
women promoted and women retained. For organizations genuinely
seeking to help women rise within the ranks, the message is clear:
It is hard to change when you don't have the right metrics to
measure improvements.

Another strong signal from employees: Include them in the design
and communications of the organization's gender parity program. In
many organizations, even if there is senior management commitment
to gender parity, employees feel no engagement with the agenda.
About 60 percent of all survey respondents report that their
company does not solicit any input from them on developing gender
parity initiatives. About one in ten states that their company does
not provide any formal feedback mechanism or opportunity for open
dialogue through questions and answers, on the subject. For true
commitment to gender parity, companies need to ask employees what
they need to make work-life balance sustainable

The Bain survey results reveal that employees are quick to spot
when their company is merely paying lip-service to the cause-and
look for key indicators like top management commitment, adequate
resources for initiatives or clear and open communications as cues
for a serious investment in gender parity issues. In our survey
findings, few companies met the mark on signaling to their
employees that they are genuinely committed to gender parity.
Nearly two-thirds of the respondents do not feel their leadership
team believes in parity as a company-wide imperative. In nearly 75
percent of the companies, the leadership team has not made gender
parity a stated and visible priority and nearly 80 percent of the
firms have not committed resources to the initiatives. One
Europe-based female senior manager in a global energy firm says:
"Unless senior leaders of the organization are sincerely and
genuinely committed to achieving gender parity and putting some
metrics and muscle behind it-it won't ever happen in my
lifetime."

Gender parity: What you can do about it

Each organization faces unique challenges on gender parity-and
therefore needs to develop the right solution that works well for
it. All organizations, however, have to tackle two key issues if
women and men are not to pay a penalty for taking time out of the
workforce to manage family responsibilities:

First, gender parity needs to be a stated strategic
priority for the organization and management must demonstrate all
the rigor-measurement, tracking, resource allocation,
accountability, and the full commitment of top leadership-it
usually displays when the organization pursues critical business
goals;

Second, companies need to develop less rigid promotion
processes and career paths-and actively promote and "de-stigmatize"
flexible career arcs within the organization-so that employees
flourish and grow in stop-and-start careers. While that is critical
in the context of women who take time off to raise children, it is
equally important for all employees-male and female-as over the
course of their career, they balance life issues such as starting a
family, looking after an ailing partner, or caring for aging
parents. Companies must ensure that promotion processes do not
penalize those who take advantage of flex- or part-time
opportunities and make sure that the re-entry process is
seamless.

Companies that do make gender parity an integral part of their
strategic goals report that the pay-off is at multiple levels. By
retaining women employees over the long term, companies create a
deeper talent pool to dip into for developing leaders-plus they
save enormously on costs such as retraining and recruiting new
replacement talent. Large professional services firms have claimed
to have saved tens of millions of dollars through effective gender
parity initiatives that welcome women back into the organization
and put them on a promotion track. Clearly, as the war for talent
increases in the future, leaders will need to do the gender math.
Increasingly, for most CEOs-male and female-managing gender parity
is not a luxury: it's a necessity to ensure continued growth and
success in the global marketplace.